Monthly Archives: February 2011

Post navigation

An asbestos plaintiff with a previous history of asbestos related cancer can’t sue for a later onset of asbestos-related cancer, the Michigan Court of Appeals said.

The decision involved an interpretation of the Michigan Supreme Court’s 1986 decision in Larson v Johns-Manville, an asbestos-specific decision that allows a plaintiff to sue for either an asymptomatic case of asbestosis and the fear of developing cancer, or wait and see if he develops lung cancer, said Ogne, Alberts & Stuart, PC, attorney Michael A. Ross.

“What Larson said was that if you get asbestosis, or something that is basically asymptomatic, we’re not going to start the clock ticking,” Ross said. “We’re going to give the plaintiff the option: he can sue for asbestosis and the possibility that he might get a malignancy later, or he can wait and see if he develops a malignancy, and therefore the clock won’t start ticking.”

When his lung cancer returned in 2006, he did sue. During his deposition, he testified that he was told his earlier onset was asbestos-related. The trial court dismissed the case.

On appeal, the plaintiff argued that Larson:

created a rule that regardless of prior asbestos-related diagnoses, the occurrence of any new asbestos-related disease constitutes a new accrual of a cause of action.

In an unpublished decision, the Court of Appeals disagreed:

We do not read Larson quite so broadly. Instead, we read Larson as holding that individuals who develop non-cancerous asbestos-related diseases and who accordingly have concerns that they will develop cancer need not bring suit relating to those less serious conditions and may instead wait to see if they develop cancer, at which time they would have the right to initiate their claim even though the time since the non-cancerous diagnosis exceeded the statute of limitations.

The Larson Court … fashioned a tolling period unique to asbestos cases, which allowed for a cause of action when a plaintiff suffered from asbestosis, and a new cause of action years later when the separate and independent disease of cancer developed.

That doesn’t mean, the court ruled, that the plaintiff can sue for each onset of the same disease.

[T]hese concerns are not present here, as the disease plaintiff developed in 1999 was itself cancer. Thus, when his 1999 cancer was diagnosed, his cause of action for asbestos-related injury accrued. There was no need for him to wait and see if he would develop cancer at a later point in time; he had already developed it. Consequently, the concerns set out in Larson do not arise and the 1999 cancer constituted the sole accrual date for cancer caused by plaintiff’s asbestos exposure. Accordingly, plaintiff’s claims are barred by the three-year statute of limitations.

Ross said the “two-disease” policy, in practice, allows plaintiffs to still receive something while not having to gamble on whether they later develop a more serious disease, like mesothelioma. Most asbestosis cases settle for a fraction of what the malignancy cases do.

“This way, they can funnel as much money to the malignancies, while not putting the plaintiff in a situation where, as soon as he gets anything, even if it’s asymptomatic, he has to go to court or lose his cause of action,” Ross said.

So Falk’s 1993 asbestosis diagnosis, was irrelevant, but he should have sued in 1999, when he was first diagnosed with asbestos-related lung cancer.

“He had three diseases,” he said. “In 1993, he had asbestosis, so, pursuant to Larson, he didn’t sue. He waited. Then in 1999, he got lung cancer. That’s when you’re supposed to sue.”

Ross said the facts of this case leave open the question of what would happen if Falk didn’t know his earlier cancer was asbestos-related, partially because Larson was based on the common law discovery rule, which the Michigan Supreme Court abrogated in Trentadue v Buckler Automatic Lawn Sprinkler Co.

“It’s an open question,” Ross said. “The general rule is that subsequent damages from the same exposure don’t start the clock ticking over again. They would be out of luck unless they could establish that they had no idea that [the earlier] diagnosis was asbestos-related.”

Is it a pointless exercise or a useful tool? There are endless debates around the water cooler and in the boardroom about this one.

How much is employee feedback valued for tax purposes?

The Michigan Department of Treasury and Ford Motor Co. are duking this one out in court.

Our story:

Ford Motor Co. leased vehicles to its own employees and retirees, and those of Ford’s subsidiaries.

Here’s how it worked in the late 1990s and early 2000s: Ford sold vehicles to its financing arm, Ford Credit. Ford Credit, in turn, leased the vehicles back to Ford at a yearly lease rate of 28.8 percent of the wholesale delivered price. Ford then subleased the vehicles to the employees and retirees at 20.8 percent of the wholesale delivered price.

But along with the apparently good deal the sublessees were getting, there was a small obligation.

Every now and then, they had to fill out a vehicle quality and performance report, a checklist of 35 items that took a few minutes to complete. The leases required this. The leases also stated that if you didn’t fill out the form when requested, you’d be in default of the lease.

Ford said most of the employed sublessees filled out the reports on company time.

Ford was required to pay Michigan use tax on the lease program based on the vehicles’ prices. The treasury department figured the price at the 28.8 percent lease rate. Ford claimed the 20.8 percent rate applied.

The version of the Use Tax Act in effect at the time, MCL 205.92(f) (later amended by 2004 PA 172), defined “price” as “the aggregate value in money of anything paid or delivered, or promised to be paid or delivered, by a consumer to a seller in the consummation and complete performance of the transaction by which tangible personal property or services are purchased or rented for storage, use, or other consumption in this state … ”

In other words, the sublessees were providing some value by filling out the required reports, and that value was part of the vehicle’s price.

But what’s the value?

It’s peanuts, said Ford in the Court of Claims. It shouldn’t even figure into the price. There’s virtually no effort involved in filling out the report. But, if you insist on a value, let’s have a hearing to figure it out.

It’s $14,727,220.41, said the treasury department. That’s the difference between the 28.8 percent and the 20.8 percent lease rates. No need for a hearing, just do the math.

The Court of Claims liked the treasury department’s approach better.

Not so fast, said the Michigan Court of Appeals. Both positions are wrong.

The use tax act, said the COA, plainly requires us to put a price tag on filling out the vehicle reports. That can’t be ignored.

But figuring the price on the difference between the lease rates isn’t the way to do it:

When the services required under the sublease agreements are given a monetary value equal to the difference between the lease and the sublease rates, an illogical result is reached: because the lease and sublease rates are a percentage of the wholesale delivery prices of the vehicles, identical services provided by the sublessees receive different monetary values.

In other words, it is illogical that the services provided by a sublessee of a luxury vehicle would have a significantly higher monetary value than the services provided by a sublessee of an economy car. …

For example, the difference between the lease rate and the sublease rate for an $86,000 Range Rover is $6,880, while the difference between the lease rate and the sublease rate for an $8,653 Ford Focus is $692.

In his first year as Chief Justice of the Michigan Supreme Court, Robert P. Young, Jr. could have felt a little disheartened to see the newly seated Gov. Rick Snyder’s proposed budget. The governor is recommending that the judiciary’s budget for 2012 remain flat — no increases,no decreases — from the 2011 level, at roughly $260 million. He also recommended a negligible — 0.6 percent — increase for 2013’s $261.9 million judiciary budget.

Could’ve been worse, Young said.

What will allow the State Court Administrative Office, or SCAO, to work with that budget, which represents a 27 percent reduction in operations expenses since 2000, is that it also includes a recommendation to eliminate six trial court judgeships, which will save the state some $942,000.

It’s about time, if you ask Young.

“I’m actually optimistic and pleased,” he said. “In every prior year for at least the last 10 years, the judiciary budget has been cutting away at muscle, and has cut into the bone. …. We have been incredibly vocal in asking the governor and legislature to reduce the number of judgeships that are no longer required.”

The court’s discretionary budget is small, he said. About two-thirds of it is “untouchable,” as it involves judicial salaries. So as the cost of health care, energy, and retirement funding has rapidly increased, operations in the courts have had to become leaner – very lean, in fact.

Since 2000, the number of judicial employees has decreased by more than 20 percent, with the number of full time equivalent positions dropping from 526 to just 413.

So losing those six judgeships represents some badly needed wiggle room in the budget, Young said.

But that doesn’t mean he’s breathing easy. For starters, he said, even though Gov. Snyder has recommended the judgeship reductions, the legislature is going to find that “it’s no cakewalk” actually eliminating them. Politically, it’s going to be difficult, Young acknowledged, as communities are likely to be less than thrilled about losing those trial judges.

Also on Young’s mind is that just because the budget will be easier to manage as a result of that significant reduction in costs, the trends point to little to no growth in the judiciary budget, or any of the state’s departmental budgets, any time soon. And it doesn’t matter much to taxpayers that costs are rising, so he’d better find ways the courts can do more with less. So, since taking the chief justice’s seat this year, he has met with every director in SCAO, getting an understanding of how they operate and where there is room for further efficiency.

“Now that I’ve met with all the directors, I do have a sense of the substantial work they do. They are incredible in that regard,” he said. What he said he wants them to do now is to think like entrepreneurs.

“In government, there is no entrepreneurial instinct,” he said. “I’m trying to encourage them to look for more efficiencies, to break down silos, and to eliminate replication of efforts.”

He’s been pleased, he said, at how receptive the directors have been.

“When you take someone’s shackles off, they say, ‘Wow, I’ve never been asked to do anything other than work in shackles,'” Young said. “For ages, the idea has been ‘We do things this way because we’ve always done it this way.’ … I’m asking people to exercise judgment, to live dangerously.”

The Sixth Circuit is the first federal appellate court to rule on the issue. Several district courts had addressed the issue with mixed results.

The WARN Act opens an employer to damages in the form of back pay and benefits if the employer doesn’t give enough advance warning of large-scale layoffs or plant closing.

At first blush, this sounds like Seventh Amendment stuff — money damages in an action at law — for which there is an undeniable right to a jury trial.

But is it? One test to determine whether a remedy is legal (say hello to the jury) or equitable (say hello to the judge) is to compare the statute to 18th-century actions brought in English courts before the merger of law and equity.

Judge Ralph B. Guy analyzed it this way:

It is undisputed that no action for failing to give advance notice of an employment loss was known to 18th-century England. …

[W]e do not see an analogy between the issue to be tried in an employee’s WARN Act claim and an action
for breach of contract — a recognized pre-merger action at law … .

Nor are the WARN Act claims analogous to a personal injury or tort action, which would be “a prototypical example of an action at law.” …

[A] better comparison might be to a breach of an employer’s fiduciary duty, which is an action recognized as equitable in nature. …

[The WARN Act] places the entire damage award — the liability for back pay and benefits — within the district court’s discretion.

It’s true that money is the usual remedy for a suit at law but money can also change hands as a form of equitable relief, such as restitution. The bottom line from the Sixth Circuit:

We are persuaded that the statutory remedies available to aggrieved employees provide equitable restitutionary relief for which there is no constitutional right to a jury trial.

The Detroit News reports that Robert Maverick is suing the people behind the “American Pie” movies, claiming a “hostile work environment filled with nipple-pinching and sexually explicit comments” while making a comedy in Michigan.

The seven-count suit, filed in U.S. District Court in Detroit, alleges Maverick “endured numerous acts of unwelcome physical contact and verbal sexual abuse during the filming of ‘Demoted,’ a 2009 comedy produced by Hollywood heavyweight Warren Zide, a Southfield native and producer of the ‘American Pie’ franchise,” according to the report.

The report added that Lansing attorney Jean Kordenbrock wrote her client suffered “mental and emotional distress, embarrassment, humiliation, and anxiety.”

(There was no mention as to whether Maverick was pressured to watch any of the straight-to-video “American Pie” movies, which would have been an embarrassing enough act in itself.)

Members of the state House Judiciary Committee appeared to be business-oriented Thursday when Janet Welch, executive director of the State Bar of Michigan, made a presentation on the Bar’s recently released Judicial Crossroads Task Force Report.

The report offers suggestions on what can be done to fix the state’s justice system during a massive state budget crisis, such as the state being responsible for funding an indigent defense system; making e-filing statewide; and a shared jurisdiction system that would reduce the number of judges.

Though the Legislature can only push for such legislation as court consolidation and indigent defense, the idea of a business docket perked the most interest.

Rep. Ken Horn, R-Frankenmuth, and Rep. Phil Cavanagh, D-Redford Twp., said they were intrigued by the three-year pilot program, which would be based in Oakland and Wayne counties, the state’s most active court systems. It would involve two or three judges solely dedicated to business-to-business disputes.

When asked whether it would involve additional costs, Welch said once it’s up and running, it would be a means of saving costs. She added that the business impact committee, which drafted the pilot idea, found that such a model would not take any resources away from each county’s existing court system.

But actual cost numbers were what some committee members most hoped to review.

While Rep. Kurt Heise, R-Plymouth, called the report a “great first step,” he added that he shared the same views as Rep. Bob Constan, D-Dearborn Heights, in that the two would have liked to see more specific recommendations with respect to court consolidations, pay cuts for judges and staffs, especially in southeast Michigan.

Essentially, “how we can see the kind of sacrifices of the judicial branch that, frankly, the rest of us are having to make, and, as we’ll learn by the end of the day [following Gov. Rick Snyder’s budget proposal presentation], that we’re going to have to make even more of.”

Welch said that there will be more specific numbers as concurrent jurisdiction plans go forward.

After the meeting, Rep. Mark Meadows, D-East Lansing, mentioned that there are bills ready to be introduced for indigent defense funding, and that stronger efforts would be made following last year’s legislative collapse. In addition, Committee Chair Rep. John Walsh, R-Livonia, said that there would be a committee made up specifically for it.

Because of time restraints, Welch was invited to return to the next committee meeting for further questions on the report.

The report, which was written for members of the Legislature, the governor and the Michigan Supreme Court to review with the intent that they will consider making changes, can be found at http://www.michbar.org/judicialcrossroads.

In the most recent edition of “Judging the Law Schools,” Thomas M. Cooley Law School is ranked No. 2 in the nation, second to Harvard but solidly ahead of Yale (which came in 10th), the University of Michigan (12th) and Stanford (30th).

It is the first time Cooley has cracked the top 10. The last time the rankings were released, in 2009, it came in at No. 12. In 1996, the year Cooley founder Thomas Brennan began producing Judging the Law Schools, it ranked a modest 72nd.

In the ranking’s introduction, Brennan and Don LeDuc, Cooley’s president and dean, write

that while total objectivity is not possible in any comparison and that the selection of criteria on which to base a comparison is itself subjective, Judging was designed intentionally to use only objective data in its comparison. …

The intent is to provide an objective, data-based alternative to the subjectivity of the U.S. News and World Report rankings.

Post navigation

MiLW Web Site

Welcome!

Since 1986, Michigan Lawyers Weekly has been keeping lawyers across the state up-to-date. Here on our blog, Michigan Lawyer, look for opinions and discussions about law-related topics of interest to lawyers and laypersons alike.